Dellarte Corporation Has Two Major Divisions-Agricultural Products and Industrial Products

Multiple Choice

Dellarte Corporation has two major divisions-Agricultural Products and Industrial Products.It provides the following information for the year. $$\begin{array} { | l | r | r | } \hline & \text { Agriculture Division } & \text { Industrial Division } \\\hline \text { Net sales } & \$ 150,000 & \$ 1,000,000 \\\hline \text { Operating income } & \$ 47,000 & \$ 235,000 \\\hline \text { Average assets } & \$ 290,000 & \$ 5,580,000 \\\hline \text { Target rate of return } & 13,0 \% & 10.0 \% \\\hline\end{array}$$ Calculate the residual income for the Agriculture Division.

A) $27,500
B) $9,300
C) $103,000
D) $47,000